Over the last five or so years, there has been a dawning realization within companies that spending on indirect goods and services is a big area of opportunity for creating efficiency and cost savings. This is not news to those of us within the profession. However, the need to do better is prominent towards achieving set goals hence, we are constantly asking the following questions.
Are we employing the right professionals?
To begin with, you ask the question ‘What kind of talent is needed?’ At the highest levels of the profession, the skills people want are the ability to analyze market demands and industry trends and put together an excellent sourcing strategy. This takes very good business acumen because we’re looking at suppliers across everything from their financials to their ability to be able to produce and deliver in different geographies to how well can they manage the customer experience.
It’s a very broad business evaluation, and it requires a person who can really spread themselves across lots of functional areas from finance to marketing to sales to relationship building and customer satisfaction skills.
Are you taking a strategic approach to your company’s indirect procurement processes?
Investing in these indirect procurement management solutions can allow for in-depth analyses, provide real-time data for better decision making, reduce your risk of working with new vendors, quicken the onboarding process, allow for easier and safer payment processing, reduce cycle times, allow for greater visibility into your category spend, and increase overall efficiencies so you can reduce the costs associated with the function. It can provide insights into opportunities, identify potential areas for savings, and alert you to liabilities that you should be controlled before they hurt your business.
Is the execution of your processes the best in practices i.e ‘tactical or strategic function’?
Many organization has not clearly defined what role the indirect procurement plays at a corporate level. In many cases, indirect procurement is relegated to the simple task of acquiring goods and services upon request. As a result, there’s no clear sense of responsibility for the efficient purchase of goods and services. Having an established, structured and standardized procurement process is essential—and procurement specialists and software can help. The fact is indirect procurement is just as valuable as direct procurement and should be managed in the same strategic way.
Are you achieving an optimal use of your existing systems?
Optimisation of the systems is necessary toward achieving profitably. So have you created optimal plans that include the resources provided by your partners? Drive these plans from an intimate understanding of real demand and profitability-driven segmentation policies. This would result in optimising your indirect expenditures and trade off significantly with an effect on your bottom line. You cannot neglect this function any longer.